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High Court of New Zealand Decisions |
Last Updated: 6 August 2018
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CIV-2016-404-2735
[2018] NZHC 1810 |
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BETWEEN
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SAVVY VINEYARDS 4334 LIMITED
First Plaintiff
SAVVY VINEYARDS 3552 LIMITED
Second Plaintiff
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AND
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WETA ESTATE LIMITED
First Defendant
TIROSH ESTATE LIMITED
Second Defendant
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Hearing:
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13 July 2018
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Appearances:
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DPH Jones QC and CL Bryant for the Plaintiffs
R E Harrison QC and W D Woodd for the Defendants
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Judgment:
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20 July 2018
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JUDGMENT OF GORDON J
This judgment was delivered by me on 20 July 2018 at 4.00 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors: Hesketh Henry, Auckland
Boyle Mathieson, Auckland
Counsel: DPH Jones QC, Auckland R E Harrison QC, Auckland
SAVVY VINEYARDS 4334 LTD v WETA ESTATE LTD [2018] NZHC 1810 [20 July 2018]
Introduction
[1] This is an application by the defendants for both a stay of proceedings and a stay of execution of judgment, pending the hearing and determination of the defendants’ appeal to the Court of Appeal against my liability judgment of 9 May 2018.1
Background
[2] I set out the background adopting the summary from my costs decision as follows:2
[1] The first plaintiff had options to purchase grapes from two vineyards owned by the first defendant under two grape supply agreements, one for each vineyard. Similar agreements existed as between the second plaintiff and second defendant.
[2] The defendants have refused to supply grapes to the plaintiffs, claiming that the plaintiffs failed to exercise their options to purchase grapes within the time specified in the grape supply agreements and those options had accordingly lapsed.
[3] The plaintiffs brought proceedings which were split into two separate stages, namely liability and (if necessary) damages.
[4] In my judgment on the liability stage, I found in favour of the plaintiffs on one of three causes of action.
[5] On the second (successful) cause of action, I made a declaration that the plaintiffs were entitled to purchase the 2016 to 2018 harvests and are entitled to purchase subsequent harvests on the terms set out in the grape supply agreements. They are therefore entitled to pursue a damages claim for the defendants’ failure to supply grapes for the 2016, 2017 and 2018 harvests.
[6] In their third (unsuccessful) cause of action, the plaintiffs sought the same relief as was sought in the second cause of action on an alternative legal basis, namely an implied contract and/or an estoppel.
[7] In their first cause of action, which was also unsuccessful, the plaintiffs claimed for their lost opportunity to exercise the options to purchase grapes from the 2014 and subsequent harvests. The plaintiffs are therefore unable to pursue a damages claim for the 2014 and 2015 harvests.
[8] I dismissed all of the defendants’ counterclaims. One was a joint counterclaim seeking declarations that the plaintiffs’ exercise of options for the 2016 and all subsequent harvests were invalid and ineffectual; and that the plaintiffs’ purchase options had permanently expired and lapsed. Second
1 Savvy Vineyards 4334 Ltd v Weta Estate Ltd [2018] NZHC 989.
2 Savvy Vineyards 4334 Ltd v Weta Estate Ltd [2018] NZHC 1771.
counterclaims were made separately by each defendant in relation to the second cause of action, seeking rectification of the grape supply agreements (these latter counterclaims were contingent on the Court accepting the plaintiffs’ interpretation of the relevant clauses in the grape supply agreements).
(Citations omitted)
Events since judgment
[3] As a consequence of my liability judgment, the plaintiffs are required to purchase grapes from the 2019 harvest from the defendants’ vineyards.3
[4] On 22 May 2018, Peter Vegar, a director and shareholder of the two plaintiffs, sent a letter to each defendant setting out the plaintiffs’ requirements of the defendants in accordance with the provisions of the grape supply agreements in relation to the new growing season, applicable to the 2019 harvest.
[5] By way of background to his letters, Mr Vegar explained in his affidavit opposing the stay, that one of the crucial issues to be resolved is the target cropping level for the 2019 vintage. Referring to his evidence at the substantive hearing, Mr Vegar repeated that the plaintiffs’ opportunity to profit from each vintage depends on there being excess tonnages available above the target cropping levels specified in the grape supply agreements.
[6] Mr Vegar says that the plaintiffs are ready, willing and able to proceed with the terms of the grape supply agreements and that his letters of 22 May 2018 were sent for that purpose.
[7] The various matters referred to by Mr Vegar in his letters include the following:
(a) That the plaintiffs would be inspecting the vineyards, with the first inspection to be on 30 May 2018;
(c) For the purposes of each AVMP, the plaintiffs needed to agree the target bunches for each vine, and the pruning and management programme required to achieve the target; and
(d) A report from Dr Jordan, the independent viticulture consultant identified in the grape supply agreements, was required. The report should set out the condition of the vineyards, their performance for the previous season, Dr Jordan’s review of the AVMPs, commenting on whether they comply with the standard viticultural industry practice, and whether each AVMP, if followed, is likely to achieve the requirements contained in the grape supply agreements.
[8] On 28 May 2018, the solicitors for the plaintiffs followed up the 22 May 2018 letters by emailing the solicitors for the defendants on the matter of access to the vineyards proposed for 30 May 2018.
[9] By letter from their solicitors dated 28 May 2018, the defendants advised that the proposed vineyard inspections would not be proceeding. The solicitors advised that they had received instructions to appeal my liability judgment and also had instructions to apply for a stay of execution pending appeal if necessary.
[10] The defendants’ solicitor’s 28 May 2018 letter finally said that they were taking instructions on the matters raised by the plaintiffs in their 22 May 2018 letters and that a full response would be provided in due course. No response has been received by the plaintiffs. However, at the hearing, Mr Harrison QC, appearing for the defendants, accepted that (limited to the context of this application) the requests or demands in the letters of 22 May 2018 all fall within the provisions of the grape supply agreements.
Appeal and cross-appeal
[11] On 28 May 2018, the defendants filed their notice of appeal against the part of my judgment allowing the second cause of action (but excluding from the appeal my conclusions in relation to the plaintiffs’ supporting arguments on that cause of action which I did not accept).
[12] The plaintiffs subsequently filed a cross-appeal against my finding that the defendants were not liable to the plaintiffs under the first cause of action. The plaintiffs also cross-appealed against the aspects of my decision on the second cause of action in relation to their supporting arguments which I did not accept.
[13] There is no appeal against my decision on the third cause of action.
The applications and opposition
[14] The defendants filed an application dated 8 June 2018 pursuant to r 12(3) of the Court of Appeal (Civil) Rules 2005. The application is supported by an affidavit of Murray Forlong, a director of the first defendant and a former director of the second defendant.
[15] The application sought a stay of proceedings to stay the plaintiffs’ pursuit of the second stage of the proceeding, that is a hearing to determine the quantum of the plaintiffs’ claim for damages under the second cause of action. The plaintiffs opposed this application.
[16] At the hearing, Mr Harrison no longer pursued the application for a stay of proceedings. But his change of position was subject to certain reservations which I refer to later in this judgment.
[17] The stay of execution relates to the plaintiffs’ declared interests in the defendants’, as yet unrealised, 2019 grape harvest.
[18] The plaintiffs do not oppose the Court staying the execution of the judgment provided that the order is made subject to two conditions as follows:
... that the defendants:
(a) Provide the information sought in the letter from Hesketh Henry for the plaintiffs dated 14 June 2018 and demonstrate that the defendants have adequate arrangements in place for a sale of the 2019 grape harvest (or wine made from those grapes) on commercial terms; and
(b) Undertake to pay the amount by which the sale of grapes (or the value of the grapes being made into wine) exceeds the purchase price payable by the plaintiffs to the defendants under the grape supply agreements between them into the trust account of a neutral solicitor. The neutral solicitor shall be required to hold the funds in trust pending a Court order directing their release.
[19] The information sought, as referred to in condition (a), is set out in the letter from Hesketh Henry as follows:
Mr Forlong’s affidavit [in support of the application before the Court] does not identify how the defendants propose to dispose of the 2019 harvest. How will the grapes be sold (e.g. as fruit or wine)? Who is the buyer? Are there already contracts in place? What are the relevant terms of those contracts (including price, payment dates, quantities, and any terms or conditions which affect the size and quality of the harvest or the condition of the vineyards and their productivity in future years)? What is the proposed target cropping level? Please provide this information as a matter of urgency.
[20] The defendants agree to condition (b) in [18] above, but not condition (a).
The law
[21] As Mr Jones QC, for the plaintiffs, correctly notes, an appeal does not operate as a stay of proceeding or a stay of execution of the judgment and an application under r 12 of the Court of Appeal (Civil) Rules 2005 is required.
[22] In Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust, the Court of Appeal said:4
[10] ... Rule 12 does not set out any criteria for the granting of a stay or interim relief, but the approach is well-established. As a starting point, a successful party is entitled to the fruits of its judgment. An appellant who seeks to stop this must make an application and show why the usual consequences of a judgment should not follow. The court will need to balance the competing rights of the party who has obtained judgment against the need to preserve the appellant’s position in the event of the appeal succeeding ...
(Citations omitted)
4 Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust [2017] NZCA 377.
[23] In Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd,
Hammond J stated:5
[8] ... It is routinely said that, at the end of the day, the test for a stay of execution is one of the justice of the given case. In the broadest sense, that must be so. But a formula which, with respect, more accurately indicates the essential nature of the balancing approach which must be adopted, is set out in the decision of Gault J in Duncan v Osborne Buildings Ltd (1992) 6 PRNZ
85. His Honour said (at p 87):
“In applications of this kind it is necessary carefully to weigh all of the factors in the balance between the right of a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful. Often it is possible to secure an intermediate position by conditions or undertakings and each case must be determined on its own circumstances.”
[24] Factors which Courts have conventionally addressed to find the appropriate balance in any given case were listed by Hammond J in Dymocks Franchise Systems as follows:6
- (a) Whether the appeal may be rendered nugatory by the lack of a stay;
(b) The bona fides of the appellant as to the prosecution of the appeal;
(c) Whether the successful party will be injuriously affected by the stay;
(d) The effect on third parties;
(e) The novelty and importance of questions involved;
(f) The public interest in the proceeding; and
(g) The overall balance of convenience.
[25] Although the above list does not include the apparent strength of the appeal, that has been treated as an additional factor.7
[26] I also refer to the comment by Woodhouse J, in SKIDS Program Management Ltd v McNeill, on the factors a Court is likely to consider:8
[9] It needs to be emphasised that these are amongst the factors that the Court is likely to consider in determining whether or not to exercise the
5 Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC).
6 At [9](1)-7).
7 Keung v GBR Investment Ltd [2010] NZCA 396 at [11].
Court’s discretion to grant stay and, if stay is to be granted, to determine what, if any, conditions should be imposed. Each case must be determined on its own circumstances. The list is not determinative. There may be other factors which, in the particular circumstances, warrant more weight than the factors referred to in Dymocks and Keung. Of the factors that are referred to in Dymocks and Keung, some may have no application. Of those that do, some may warrant less weight than others.
(Citations omitted)
Stay of execution
Submissions for the applicants
[27] Mr Harrison prefaces his submissions by saying that the defendants reserve their ultimate position on whether a stay of execution is strictly necessary in respect of a judgment which is declaratory only. A stay is sought without prejudice to that position in the interests of both sides knowing where they stand pending the appeal hearing.
[28] Mr Harrison says that the defendants are also prepared to give the usual undertaking as to speedy prosecution of their appeal.
[29] Mr Harrison submits that the competing interests raised by this application are not those arising in typical stay pending appeal cases. Mr Harrison identifies the interests at stake as the plaintiffs’ prospective declared interests in the as yet unrealised 2019 grape harvest and the defendants’ interests in the status quo in relation to management of their vineyards pending the appeal. He submits the question for the Court concerns how the asserted competing interests of the parties can best be resolved in the interests of justice pending appeal.
[30] Mr Harrison submits that an undertaking or conditional order adopting condition (b) (in [18] above) would resolve the plaintiffs’ concerns as to the defendants’ ability (should their appeal be unsuccessful) to satisfy a monetary judgment in relation to the 2019 grape harvest.
[31] Mr Harrison refers to the assurance provided by Mr Forlong in his affidavit that “each of the defendants has a substantial asset or assets in the form of its vineyard
lands and operation, and is in a position to pay any damage [sic] suffered by the plaintiffs as a consequence of the granting of a stay”.
[32] Mr Harrison says the defendants are not willing to disclose how they intend to dispose of the 2019 grape harvest or the entities with whom they will deal in disposing of it because of a concern, Mr Harrison says, that the plaintiffs may cause problems by asserting their rights to that harvest if the people the defendants are dealing with are known. The defendants have therefore chosen not to disclose that information. There has been a conscious decision not to provide it to the plaintiffs (and also not to this Court).
[33] But Mr Harrison says the defendants can be expected to manage their respective vineyards with a view to achieving best obtainable cropping and grape quality levels in their own financial interests. Any shortcomings in this regard, ultimately established by the plaintiffs, can be addressed by way of an award of damages (I note that this submission is made despite the defendants not providing any evidence to the Court as to the defendants’ level of equity in the vineyards).
[34] Mr Jones submits that if the Court is to grant a stay, both conditions (a) and (b) (in [18] above) are necessary. Condition (b) on its own will not sufficiently protect the plaintiffs’ interests. The plaintiffs need to know that any arrangements with other buyers are made on commercial terms. Mr Jones says that the failure to provide this information is of concern, first, because the plaintiffs are required to pay the defendants a fair market price per tonne for the grapes (being the Marlborough average price per tonne) up to a specified level. In order to make a profit, the plaintiffs would on-sell the grapes for a similar price per tonne, their profit being made on the surplus tonnes harvested over and above the designated cropping level. Accordingly, Mr Jones submits that if the defendants were to dispose of the grapes for the 2019 harvest for less than the Marlborough average price per tonne, the plaintiffs’ profit may be reduced or extinguished.
[35] Mr Jones further submits that if the defendants wished to deprive the plaintiffs of the benefit that would accrue to them of any excess tonnages above the target cropping level, all the defendants would need to do is to enter into a transaction with
a related party which is on the same terms as the grape supply agreements between the plaintiffs and the defendants. In that way, the related party would then receive the benefits from the excess above the target cropping level and the defendants would receive the amount under the agreement for the target cropping level. There would then be nothing available to be paid and held by any independent solicitor under condition (b).
[36] Alternatively, Mr Jones says the defendants might make an arrangement with a buyer that the buyer need only pay for the amount harvested up to the target cropping level and defer payment for the balance above the target cropping level until the defendants made demand. Again, there would be nothing left to pay into the trust account of the independent solicitor.
[37] Mr Jones therefore submits that it is critical from the plaintiffs’ perspective that the terms of any arrangements made between the defendants and other buyers are on commercial terms.
[38] In response to the submission on behalf of the defendants that any shortcomings by the defendants to obtain the best cropping and grape quality levels could be addressed by way of an award of damages, Mr Jones refers to the variations in the priority amounts under the mortgages which occurred in June 2017. He says the defendants’ ability to meet an award of damages is not known.
[39] In his affidavit, Mr Vegar, while noting that Mr Forlong in his affidavit says that each of the two defendants has substantial assets in the form of their vineyard lands and operation, says that Mr Forlong has given no detail of the equity held by the defendants in the vineyards. The Tirosh vineyard has an assessed capital value of
$14,600,000, but there is a mortgage over the vineyard in favour of the Bank of New Zealand with a priority amount of $16,117,500 plus interest.
[40] In relation to Weta, the assessed capital value of its vineyards is $24,500,000. At the substantive hearing, Mr Forlong gave evidence that the value of Weta’s vineyards was around $30,000,000. There are two mortgages over the titles to Weta’s vineyards. The first mortgage is in favour of the ANZ Bank. Its priority amount was
increased from $18,900,000 to $51,000,000 plus interest in June 2017. There is a second mortgage in favour of what appears to be Mr Forlong’s family trust with a priority amount of $25,000,000 plus interest.
[41] Mr Vegar acknowledges that the actual amounts secured against the vineyards may differ from the priority sum, but he says that the plaintiffs do not know what level of equity is held by the defendants, as they have provided nothing to verify equity.
[42] Mr Jones submits that the failure of the defendants to respond to Mr Vegar’s affidavit on the issue of equity and the availability of assets to satisfy any judgment is a glaring omission, along with the deliberate stance of not disclosing any information about potential on-sales of the 2019 harvest to third parties. Mr Jones submits there is no legitimate basis for not disclosing either of those pieces of information, and that an adverse inference should be drawn from this lack of disclosure and that should militate against a stay.
[43] I accept Mr Harrison’s characterisation that the competing interests in this case are not those typically arising in cases where a stay is sought pending appeal.
[44] The key factors in this case are whether the plaintiffs will be injuriously affected by the stay, and the overall balance of convenience. There is no suggestion that the appeal may be rendered nugatory by the lack of a stay. I also accept the bona fides of the defendants as to the prosecution of the appeal (although progress as at the date of the hearing had been minimal, but this was for reasons as to counsel availability which I accept).
[45] There are no novel questions of law arising out of the defendants’ appeal and there is no public interest in the proceeding. The Court is not able to assess the effect on third parties because of the defendants’ conscious decision not to make this information available.
[46] I consider there is a basis for drawing the inference that the plaintiffs will be injuriously affected by a stay of execution. In that regard, I refer to the concerns expressed by Mr Jones and set out in [34] to [37] above.
[47] The defendants have deliberately chosen not to provide the Court with any information regarding arrangements, potential or actual, with third parties for the sale of grapes from the 2019 harvest. The timetable I directed for this hearing included a provision for reply affidavits. The defendants could have responded to the concerns raised by Mr Vegar in his affidavit on this issue, but they have chosen not to.
[48] Further, the reason put forward by Mr Harrison as to why the defendants did not wish to disclose any information regarding third parties, namely that the plaintiffs might approach those third parties and assert an entitlement to the grape crop, does not withstand close scrutiny. If there are arrangements with third parties on a commercial basis, there seems to be no reason why the plaintiffs would try to upset such arrangements. It would not be in their interests to do so. There is therefore no apparent legitimate basis for the defendants not to disclose the information regarding third parties if indeed the arrangements between the defendants and any third parties are on commercial terms.
[49] That leads me to conclude that a stay of execution with condition (b) only will lead to the plaintiffs being injuriously affected.
[50] The Court is also in the dark as to the defendants’ ability to meet an award of damages if the plaintiffs were successful on appeal and their fears regarding the defendants’ proposed sale agreements for the 2019 harvest were realised. Despite Mr Vegar raising this issue in his affidavit, there has been a deliberate and conscious decision on the part of the defendants not to respond when they had the opportunity to do so by way of a reply affidavit.
[51] However, I have concerns that while condition (a) has been drafted by the plaintiffs in order to protect their interests, the part of the condition requiring the defendants to demonstrate that any arrangements in place for a sale of the 2019 grape harvest (or wine made from those grapes) are on commercial terms lacks precision.
What does “commercial terms” mean in the context of the grape supply agreements? How are those terms to be measured? Who is to determine what are commercial terms? To impose such a condition, especially given the level of distrust between the parties, would create potential for further disputes and involvement of the Court.
[52] I therefore do not consider that condition (a) is the answer, but equally as I have determined above, condition (b) on its own is not sufficient to protect the plaintiffs’ interests.
[53] If the application for a stay of execution were to be refused outright, then the provisions of the grape supply agreements apply. While Mr Forlong described the plaintiffs’ requests and demands in the plaintiffs’ letters of 22 May 2018 as micro- management, they are simply a consequence of the operation of the grape supply agreements which the defendants signed and which Mr Vegar described in his affidavit as being common in grape supply agreements.
[54] Further, the grape supply agreements contain a provision for a review of each AVMP by designated independent consultant Dr Jordan, for the purpose of commenting on whether they comply with standard viticulture industry practice and whether the AVMPs, if followed, are likely to achieve the requirements contained in the grape supply agreements. Importantly, any dispute between the parties over the AVMPs must be referred to Dr Jordan whose decision binds the parties. There is therefore a mechanism built in for resolving disputes.
[55] For all the above reasons, I consider that the overall balance of convenience favours the refusal of a stay of execution.
Stay of proceedings
[56] I can deal with the application for a stay of proceedings relatively briefly given the defendants’ change of position at the hearing.
[57] In an earlier memorandum dated 30 May 2018, the plaintiffs requested that timetable directions be made to progress the damages hearing. Proposed timetable
directions were set out in the memorandum, including a direction that a fixture be allocated on the first available date after 12 October 2018.
[58] However, in the plaintiffs’ submissions of 9 July 2018 filed for this hearing, the plaintiffs record their understanding that there is no time available for a five-day fixture before June 2019. At the hearing, Mr Jones’ position was that the plaintiffs would agree not to seek a fixture before the end of July 2019.
[59] Mr Harrison accepted that it is conceivable that a judgment from the Court of Appeal may well be available with sufficient time for the parties to prepare for a damages hearing after the end of July 2019, with the hearing including, if necessary, claims for the 2014/2015 years (if the plaintiffs were to succeed on the cross-appeal). This would answer Mr Harrison’s concerns over the potential for two separate damages hearing, which he submits would not be in the public interest or the financial and practical interest of the defendants (at least).
[60] Mr Harrison accordingly elected not to pursue the application for a stay of proceedings, but reserved the defendants’ right to apply to seek an adjournment of the hearing if the Court of Appeal judgment was delayed.
[61] I therefore dismiss the defendants’ application for a stay of this proceeding.
Directions for the second stage/quantum hearing (2016-2018 harvests)
[62] I make the following orders:
(a) By consent, the plaintiffs are to provide tailored discovery of documents by 10 September 2018 as follows:
(i) All documents not previously discovered in the proceedings on which the plaintiffs will seek to rely in support of their damages claims;
(ii) In particular, all documents in the possession or control of the plaintiffs recording New Zealand sales or sale prices for all
grape varieties grown on the defendants’ vineyards for the 2016, 2017 and 2018 grape harvests.
(b) By consent, the defendants are to provide tailored discovery of documents in accordance with the list attached as Annexure A to this judgment for each variety of grapes grown on the defendants’ vineyards for the 2016, 2017 and 2018 grape harvests by 10 September 2018.
(c) By consent, inspection of discovered documents shall be completed by
24 September 2018.
(d) By consent, the plaintiffs shall, by 29 October 2018, each provide full particulars in relation to each of the 2016, 2017 and 2018 grape harvests, of all damages and losses claimed and of the basis on which all such damages or losses are calculated.
(e) If there is any dispute as to the adequacy of the particulars provided by the plaintiffs which cannot be resolved between the parties, the parties shall each file and serve a memorandum by 5 pm on 14 November 2018.
(f) There will be a telephone conference before me at 9 am on 21 November 2018. If the parties consider that a telephone conference is unnecessary, a joint memorandum may be filed and the telephone conference will be cancelled. Alternatively, the parties have leave to request a face to face conference rather than a telephone conference if it is considered necessary.
(g) By consent, an eight-day fixture is to be allocated on the first available date (suitable to counsel) after 31 July 2019.
(h) By consent, the following pre-trial directions shall apply:
- (i) Plaintiffs’ briefs to be filed and served 25 working days before the hearing, together with an index of documents proposed for the trial bundle.
(ii) Defendants’ briefs to be filed and served 15 working days before the hearing, together with an index of any additional documents the defendants wish to include in the trial bundle.
(iii) Plaintiffs’ reply briefs to be filed and served 10 working days before the hearing.
(iv) Plaintiffs to provide the defendants with a draft chronology 10 working days before the hearing. Chronology to be agreed if possible.
(v) Plaintiffs to file and serve trial bundle and chronology five working days before the hearing.
(vi) Plaintiffs’ opening to be filed and served two working days before the hearing.
(i) Either party has leave to apply for further directions if required.
Conclusion
[63] I make the following orders:
(a) The application for a stay of execution is dismissed; and
(b) The application for a stay of proceedings is dismissed.
Costs
[64] Both counsel addressed me on the question of costs in relation to the application for a stay of proceedings.
[65] Mr Harrison’s submission was that costs should lie where they fall. He submits that the plaintiffs began by filing their memorandum of 30 May 2018 seeking directions, including that there be a hearing of the second stage damages hearing by the end of this year. Mr Harrison says, in response to that stance, the defendants applied for a stay which the plaintiffs opposed outright. As at the date of a telephone conference the Court held on 15 June 2018, the plaintiffs were still seeking the same timetable orders, including a hearing by the end of this year.
[66] The defendants then filed their submissions in support of the stay application on 3 July 2018. It was only when the defendants’ submissions were served on 9 July 2018 that the picture had changed regarding a hearing date. That is, that a hearing would not be available before the end of June 2019. That led to the defendants changing their position at the hearing. For all those reasons, Mr Harrison submits that costs should lie where they fall on the application for a stay of proceedings.
[67] Mr Jones submits that the plaintiffs should be awarded costs. He says it would have been a simple matter for the defendants to have responded to the plaintiffs advising that they would not be pursuing the stay application, following receipt of the plaintiffs’ submissions which record that there would not be hearing time available in this court before June 2019. Instead, Mr Jones says the matter was required to go to a hearing.
[68] In my view, the plaintiffs are entitled to costs. They have succeeded in their opposition to the application for a stay of proceedings. I accept that the date the plaintiffs proposed for a hearing changed from the time of their conference memorandum to the date of their submissions. But the defendants did not engage with the plaintiffs prior to the hearing on receipt of the plaintiffs’ submissions. The plaintiffs were required to prepare for the hearing before me. I do not accept Mr
Harrison’s submission that matters were “thrashed out” at the hearing. There was simply an adjustment to the plaintiffs’ suggested timetable for the steps in [62](a) to (f).
[69] Costs are on a 2B basis. Having regard to my decision that the plaintiffs are entitled to costs on the dismissal of the application for a stay of proceedings, I would expect that a joint memorandum on this aspect at least, should be possible.
[70] Counsel did not address me on costs on the stay of execution.
[71] The plaintiffs, as the successful parties on this application, are entitled to costs. I would hope that agreement can be reached. If so, a joint memorandum is to be filed within 15 working days of this judgment. If agreement cannot be reached, the plaintiffs may file a memorandum within five working days after the date for the joint memorandum and the defendants may file a memorandum within a further five workings days. Memoranda are not to exceed four pages.
Gordon J
Annexure A
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